G20 financial leaders to inform each other ahead on policy decisions that could devalue currencies
Intra-Day Market Moving News and Views
29 Feb 2016 00:52GMT
On G20 meeting, Reuters reported that the financial leaders of the world's 20 biggest economies agreed to inform each other in advance about policy decisions that could lead to devaluations of their currencies.
This move is an addition to the traditional declaration in G20 communiques that countries will refrain from competitive evaluations, Dijsselbloem said in Shanghai. The decision was prompted by concerns among some of G20 financial leaders about the possibility of competitive devaluations in Japan or China, he said.
At the same time the communique said the G20 would better monitor capital flows and identify associated risks.
Dijsselbloem said in cases where devaluation is a consequence of monetary policy motivated by real macroeconomic domestic reasons, then members must make sure to inform each other in advance to avoid surprises and this is an extra commitment between the G20 countries that they will refrain from competitive devaluations.
On USD Reuters reported speculators pared bullish bets on the U.S. dollar for a ninth straight week, as net longs fell to their lowest level since the third week of May 2014, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
The value of the dollar's net long position sank to $5.75 billion in the week ended Feb. 23, from $8.31 billion the previous week. It was the second straight week that net dollar longs came in below $10 billion.
The decline in oil and stocks as well as a slowdown in China have pushed back expectations for an interest rate hike by the Fed to some time next year. That's a negative for the dollar, prompting investors to liquidate most of their net long positions on the greenback.
So far on the year, the dollar index has been down 0.6 percent, after posting gains in excess of 9 percent in 2015.
In other currencies, investors pushed net long positions on the yen to their highest level in four years. The expectation is that the Bank of Japan won't do as much quantitative easing as the market expected.
Intra-Day Market Moving News and Views
29 Feb 2016 00:52GMT
On G20 meeting, Reuters reported that the financial leaders of the world's 20 biggest economies agreed to inform each other in advance about policy decisions that could lead to devaluations of their currencies.
This move is an addition to the traditional declaration in G20 communiques that countries will refrain from competitive evaluations, Dijsselbloem said in Shanghai. The decision was prompted by concerns among some of G20 financial leaders about the possibility of competitive devaluations in Japan or China, he said.
At the same time the communique said the G20 would better monitor capital flows and identify associated risks.
Dijsselbloem said in cases where devaluation is a consequence of monetary policy motivated by real macroeconomic domestic reasons, then members must make sure to inform each other in advance to avoid surprises and this is an extra commitment between the G20 countries that they will refrain from competitive devaluations.
On USD Reuters reported speculators pared bullish bets on the U.S. dollar for a ninth straight week, as net longs fell to their lowest level since the third week of May 2014, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday.
The value of the dollar's net long position sank to $5.75 billion in the week ended Feb. 23, from $8.31 billion the previous week. It was the second straight week that net dollar longs came in below $10 billion.
The decline in oil and stocks as well as a slowdown in China have pushed back expectations for an interest rate hike by the Fed to some time next year. That's a negative for the dollar, prompting investors to liquidate most of their net long positions on the greenback.
So far on the year, the dollar index has been down 0.6 percent, after posting gains in excess of 9 percent in 2015.
In other currencies, investors pushed net long positions on the yen to their highest level in four years. The expectation is that the Bank of Japan won't do as much quantitative easing as the market expected.
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